For A-BInBev, North America is a Drag: Volume Down 3.4% in Year, Share Falls 75 bps, But EBITDA is Up in U.S. 1.9%

North America is the only region in which Anheuser-Busch InBev reports lower volume in fiscal 2017.  In every other region, the global brewer reported organic growth, from as little as 0.3% in Asia Pacific to as much as 8.4% in its Latin America South region.  But thanks to North America, for the company as a whole, A-B InBev said its volume grew only 0.6%

Price hikes and volume/mix allowed the global company to report a 5.1% growth in revenue, and a 64% surge in profit, to $7.967 million, or $4.04 a share.  It attributed that growth to its acquisition of SAB and noted that its revenue CAGR of 4.6% “exceeded that of all our global FMCG peers” – companies such as L’Oréal (up 4.4%), Coca-Cola (up 3.3%), Heineken (up 3.1%), Diageo (up 2.4%), Pernod Ricard (up 2.2) and Carlsberg (up 1.6%).

EBITDA in the U.S. was up 1.9%, the company said, and Michelob Ultra remains the biggest share gainer in the country for the 11th straight quarter.  Still, A-B InBev conceded, “We know we have work to do in the U.S. to balance the share and profitability equation, and we remain committed to improving our share performance.”

What’s wrong in the U.S. is Bud Light, which is focused on “social conversation,” not selling the beer itself.  From this morning’s earnings report:

Budweiser saw improved brand health and consideration trends, as it amplified key cultural moments throughout the year. We launched the 1933 Repeal Reserve in the fourth quarter, which was positioned as an Above Premium brand and sold out in less than four weeks. We will leverage this momentum in 2018, solidifying Budweiser’s position as the “Great American Lager” with a focus on quality, while continuing to build on the successful America platform and scaling up on sports and food occasions.

“While we continue to face challenges on Bud Light, we are seeing some encouraging signs. In the second half of 2017, the brand was prevalent across US pop-culture with its highly popular “Dilly-Dilly” campaign, making it the leading beer in social conversation in 4Q17 and solidifying the brand’s “Famous Among Friends” positioning. Heading into 2018, we will continue to leverage the popularity of the campaign, augmenting it with quality messaging and innovation. We will continue to enhance our hyper-local execution, building on our learnings from key test markets in 2017. We remain committed and focused on stabilizing Bud Light within its segment and improving its volume performance.”

A-B’s Value Brands portfolio “showed improved trends this year, with the Busch brand family and Bud Ice leading the way,” the company said.

With ABI estimating its market share in the U.S. declined 75 basis points last year, it found some hope in the fourth quarter, where total U.S. market share declined 55 basis points.  To be sure, a 55 bps decline is better than 75 bps – but it’s still a significant drop.

For the full year, U.S. EBITDA rose 1.9% and fourth quarter EBITDA rose 6.1%.

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